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Restore Louisiana Small Business Program
03_RLSB GUIDELINES_v2.3 updated 10262017.docx Updated: 26-Oct-2017
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Program Guidelines
Glossary of Terms Applicant Business: Small business that submits an application for the RLSB program.
Awarded Business: Small business that meets all RLSB program eligibility requirements, as defined
herein, and is a recipient of RLSB program funds.
Community Development Block Grant-Disaster Recovery (CDBG-DR): Assistance from HUD to help
the State recover from presidentially declared disasters, especially in low-income areas, subject to
availability of supplemental appropriations.
Cooperative Endeavor Agreement (CEA): The written contract between OCD-DRU and the
Subrecipient.
Duplication of Benefits: Financial assistance received from another source that is provided for the
same purpose as the CBDG-DR funds.
Low to Moderate Income Job: a job is considered to be made available to or held by a person of low
or moderate income if the annual salary or wages paid are at or below 80 percent of an area’s median
household income for one person. All income is based on the area median income limits set annually
by HUD for each for each parish or metropolitan statistical area.
Microenterprise: A commercial enterprise that has five or fewer employees, one or more of whom
owns the enterprise.
National Flood Insurance Program: Program managed by the Federal Emergency Management
Administration that offers flood insurance to homeowners, renters and business owners if their
community participates in the NFIP.
Notice Of Funding Availability: Solicitation for grant applications from qualified lenders to
participate as Subrecipients in the RLSB program.
Office of Community Development Disaster Recovery Unit: A Louisiana governmental agency of
the Division of Administration, created to administer Disaster Recovery Community Development
Block Grant funds that are allocated by HUD to the State of Louisiana.
Respondent: A lending organization that provides an Application in response to the Notice of Funding
Availability.
Restore Louisiana Small Business Program: Loan program established to provide assistance to
small businesses located in areas adversely affected by the storms and flooding events of 2016 in
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Louisiana.
Revolving Loan Fund: A restricted account that each Subrecipient will place principal and interest
payments collected from awarded businesses. The Subrecipient must disburse these funds
according to program policies and procedures.
Sage CRM: Customer relationship management system used to track loan applications submitted to
Subrecipients for the RLSB program.
Subrecipient: A governmental agency or non-profit organization that OCD-DRU engages to
implement the RLSB program. Subrecipients may also be referred to as the lenders of the program.
U.S. Small Business Administration: A federal agency that provides support and disaster loans to
small businesses.
U.S. Department of Housing and Urban Development: Administering agency for the Community
Development Block Grant-Disaster Recovery program funds that are available to the State from an
appropriation by the United States Congress and are funding this program.
Program Description The Office of Community Development, Disaster Recovery Unit (OCD-DRU) has worked with the
Louisiana Department of Economic Development (LED) and other federal, state and local economic
development partners to create the Restore Louisiana Small Business Program (RLSB) to provide
assistance to small businesses located in areas adversely affected by the 2016 Severe Storms and
Flooding Events. OCD-DRU will provide program assistance to eligible businesses and/or non-profit
organizations through participating non-profit lenders, credit union and/or community development
financial institutions (Subrecipients) who will implement and administer a lending program to assist
impacted businesses and non-profits.
Total funding available for the RLSB is $51.2 million for loans and costs to implement the program by
selected Subrecipients. This program is funded through the Community Development Block Grant
Disaster Recovery Program (CDBG-DR) from the U.S. Department of Housing and Urban Development
as eligible under Section 105(a)(15) or 105(a) 17 of the Housing and Community Development Act of
1974 (HCDA).
The activities will meet the national objectives of benefitting persons of low to moderate income or
urgent need.
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Subrecipient Eligibility Subrecipients must qualify as a quasi-public or non-profit organization established under Section
501 of the Internal Revenue Code of 1986 (the “Code”), as amended, or a for-profit organization
that is certified by the U.S. Department of Treasury as a Community Development Financial
Institution or a Community-Based Development Organization as defined by HUD. Insured and
active credit unions are also eligible to participate, provided they can demonstrate their ability to
comply and issue loans according to program policies and procedures.
Eligible Subrecipients will be those organizations that have expertise in lending and at the time of
application are actively lending to small businesses in Louisiana. OCD-DRU will give preference to
those organizations that have experience working with small businesses that have difficulty
securing loans from traditional lending sources. Preference may also be given to those
organizations that have the ability to serve multiple eligible parishes.
An organization must meet the following criteria for selection as a program Subrecipient and must
comply with the terms of these Guidelines:
It has a viable track record delivering loans to small businesses;
It employs policies and practices consistent with the purpose and requirements of the
program;
It can demonstrate that it has the institutional capacity to implement and deliver the
program effectively through the use of predominantly in-house staff and internal
competencies;
It is not established as a religious or political organization; and
It has an established office in Louisiana.
OCD-DRU will review and designate Respondent Subrecipients for eligibility under HCDA Section 105(a)
15, as per the policy and procedure detailed in the “OCD-DRU Procedures for Designating a
Subrecipient or Subgrantee to Carry Out Eligible Activities Described Under HCDA Section 105(a) 15.”
Respondent Subrecipients may not be eligible under the program if OCD-DRU cannot designate them
under HCDA 105(a) 15. However, should the state choose to engage the Subrecipient without
designating them under HCDA 105(a)15, loans will meet the eligible activity of HCDA 105(a)17 and loan
repayments generated by those awarded businesses shall be considered program income. Program
income generated under this program may be required to return to the state or OCD-DRU may
authorize Subrecipients to expend program income on other CDBG-DR eligible activities, subject to
approval by OCD-DRU in its sole discretion.
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Program Documents/Manuals OCD-DRU shall prepare a comprehensive program manual including program documentation
guidelines, monitoring requirements and other documents necessary to the implementation of the
program, which OCD-DRU will provide to each approved Subrecipient. Subrecipients will use the
information and guidelines contained within the program manual to implement and administer the
program. OCD-DRU will monitor its Subrecipients for compliance with the program guidelines
detailed within the program manual, guidelines and documents. Should OCD-DRU update or amend
the program policies and procedures, Subrecipients will receive the updated documents and
technical assistance to ensure they understand the revised program policies and procedures.
Program Outreach Businesses will be able to obtain information about program timing and participation at OCD-DRU’s
website (restore.la.gov). OCD-DRU and Subrecipients will undertake program outreach to
encourage impacted businesses to apply to the program, as per the program outreach plan. Some
components of the plan include:
OCD-DRU will advertise the program in multiple media outlets and will contact local
chambers of commerce to notify them of program availability.
Subrecipients will conduct local outreach to ensure businesses in their parishes are aware
of the program.
Businesses may also obtain information about the program online and from each
Subrecipient location.
Program Administration: OCD-DRU and Subrecipients OCD-DRU will advertise a Notice of Funding Availability for potential Subrecipients
(Respondents) to apply to administer the RLSB.
A committee comprised of OCD-DRU staff and potentially other state agency and/or
stakeholder agency staff will review, score and select Subrecipients from the pool of
Respondents.
Awarded Subrecipients will be responsible for applicant intake, selection, review, lending
activities, loan collections processes and all other program implementation duties specified
by OCD-DRU.
Subrecipients will host one or more intake centers throughout their designated service areas
to ensure business owners have convenient access to the program. OCD-DRU will provide
the program guidelines, templates and checklists for providing program information to
applicant businesses, for processing applications, issuing award or denial letters, loan
documents, and all other official program correspondence or documentation.
Subrecipients will make referrals for eligible businesses to receive Technical Assistance to
ensure comprehensive attention to small business needs. The Small Business Technical
Assistance Program is another recovery program offered by OCD-DRU.
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Subrecipients will enter into loan agreements directly with awarded businesses. OCD-DRU
will provide the program legal templates for all Subrecipients to use.
OCD-DRU will monitor the Subrecipients’ approved and denied loans for adherence to
compliance and performance requirements, as detailed within this document and all other
program guidelines, appendices and/or memos.
The Subrecipients shall comply with all application review and documentation measures
contained within this document, which shall not be construed to be an exclusive listing.
OCD-DRU will monitor program Subrecipients for compliance with the RLSB program rules and
guidelines.
Funding Allocation to Subrecipients OCD-DRU will provide assistance to Subrecipients for the actual costs needed to implement the RLSB.
OCD-DRU will determine the amount to award each of the Subrecipients based on an assessment of
capacity and the anticipated demand from impacted businesses in the region(s) targeted by each of
the Subrecipients. It is likely that each Subrecipient will be awarded a different amount by the RLSB.
Furthermore, it is the aim of OCD-DRU to ensure as much program funding as possible is issued in
the form of assistance to impacted small businesses, however the state understands it is time-
consuming and labor-intensive to implement this program.
Therefore, each Subrecipient will be required to submit an implementation budget to OCD-DRU for
approval prior to incurring costs included in the budget. OCD-DRU will review each budget for
reasonableness. Budgets are subject to the following caps:
Program Delivery Costs: 15% of the total amount approved for the Subrecipient by OCD-DRU
Administration Costs: 1% of the total amount approved for the Subrecipient by OCD-DRU
Once the program is underway, OCD-DRU may allow for budget amendments and/or a budget
increase beyond the program caps on a case-by-case basis, subject to review of the Subrecipient’s
justification. OCD-DRU may approve or deny the exceptions requests in its sole discretion. Costs
incurred prior to OCD-DRU’s approval of budget amendment requests may not be reimbursed by the
program.
Program Delivery Costs: Program Delivery Costs are those costs associated with direct delivery of
the Program. Program Delivery Costs are generally linked to a project or are project-specific. They
are costs directly related to implementing the eligible CDBG-DR projects/activity. This includes the
costs of carrying out the eligible activity and include Subrecipients’ costs, as well as third parties’
(subgrantees and contractors). For example, the time spent by staff conducting application intake,
applicant and jobs income verification, use of funds verification, underwriting and loan closings
would be considered to be costs of delivering the activity.
Program Delivery Costs must be direct costs related to the Program and cannot exceed 15% of the
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total budget.
Administration Costs: Costs incurred by the Subrecipient and/or its subgrantees or contractors for
performing overall general administrative functions, including:
general management, oversight and coordination;
providing local officials and citizens with information about the general CDBG program;
preparing budget, invoices and schedules;
preparing reports and other HUD required documents;
monitoring program activities
All administrative costs must be direct costs related to the Program, and cannot exceed 1% of the
total budget.
Direct Program Costs: The amounts distributed to eligible businesses in the form of a loan. All other
funding awarded to a Subrecipient that does not pay for program delivery or administration costs
will fund Direct Program Costs.
Program Reporting and Monitoring
Reporting
Subrecipients will establish program targets and benchmarks and will be required to report the
following data on a quarterly basis to OCD-DRU. Subrecipients must submit the information
electronically through the database and/or case management system specified by OCD-DRU. Data
requested may include the following and other items:
Number and dollar value of loans originated;
Uses of funds for each of the loans originated (e.g. working capital, inventory, movable
equipment);
Number of loans under review, denied, approved and closed;
Information on jobs created or retained by each of the businesses and tenant businesses
directly and indirectly assisted including the total number of individuals in each job position,
job titles and salaries, and Low to Moderate Income status. For microenterprises,
Subrecipients are required to collect and report on the household income of the owner of
the business. This information is required for each business and will be reported to OCD-
DRU, with support documentation maintained in the Subrecipients’ loan files;
Loan portfolio aging reports.
Subrecipients may be required to provide updated information to OCD-DRU more frequently when
requested by OCD-DRU. Should Subrecipients be unable to meet established benchmarks and
program targets, they may submit a request to OCD-DRU that modifies their deliverables and
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indicators.
Program Monitoring
Subrecipients are responsible for implementing the program in a compliant manner, per the program
policies and procedures and all applicable state and federal regulations. Subrecipients are required:
to review applicant businesses for program eligibility; to calculate eligible award amounts; to collect
and retain documentation pertaining to the final eligibility, uses of funds and award determination
of an applicant business; and to collect loans per the terms of the program loan agreements and
internal collections policies.
OCD-DRU will monitor Subrecipients for compliance with all program guidelines, memos and
procedures and all applicable state and federal regulations. OCD-DRU Program Managers and
Program Monitors, will make scheduled visits to the Subrecipients to ensure program compliance,
implementation consistency and accuracy of information sent to OCD-DRU. Program Monitors may
also visit awarded businesses to monitor eligibility, use of funds and compliance with the program.
Subrecipients will maintain comprehensive and accurate program records, including, but not
necessarily limited to, the following:
Subrecipient financial records (budget, general ledger, bank statements, cancelled checks,
supporting invoices, financial statements, procurement documentation, etc.).
Programmatic records for each approved and denied business applicant. Documentation
shall include, but is not limited to: business applications; approval and/or denial forms and
letters; legal documents (promissory notes and loan documents); receipts and uses of funds
documentation; jobs retention and creation documentation from approved businesses and
their tenants, where applicable; income documentation for owners of microenterprises;
compliance documentation for loan monitoring; loan aging reports; etc.
Where applicable, monitoring reports of Subrecipients’ monitoring of program contractors
and/or subgrantees;
Any other documents that the Subrecipient considers material to a potential audit;
Subrecipient agrees to the completion of an annual audit or financial report, the level of which is
determined by the total funding awarded to the Subrecipient by all state and/or federal resources,
as required by state and federal regulations. Subrecipient also agrees to provide copies of requisite
audits or financial reports to the Louisiana Legislative Auditor (LLA) and OCD-DRU. Failure to do so
may place the Subrecipient on the LLA’s or OCD-DRU’s non-compliance list, which may result in the
inability to fund the Subrecipient.
Subrecipient agrees to maintain all books and records for five (5) years following the final closeout
of the grant from HUD to OCD-DRU. Subrecipients are encouraged to convert all paper files to
electronic files. However, if any litigation, claim, negotiation audit or other action involving the
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records has been started before the expiration of the five-year period, the records must be retained
until completion of the action and resolution of all issues which arise from it, or until the end of the
regular five-year period, whichever is later.
In addition, the Subrecipient shall allow OCD-DRU, HUD, the LLA and any other state or federal
agency seeking to monitor the Subrecipient access to all books, accounts, records, reports, files, and
other electronic or paper documentation pertaining to the administration, receipt and use of federal
funds and necessary to facilitate such reviews and audits.
Revolving Loan Fund and Loan Collections
Subrecipients will be responsible for collecting loans per internal loan policies, along with CDBG-DR
regulations. Subrecipients must make customary and reasonable efforts to collect on loans per
internal loan policies. Eligible loan proceeds (principal and interest payments) collected by the
Subrecipient may remain with the Subrecipient, provided they are placed in a separate Revolving
Loan Fund, which may be monitored for eligible uses of funds and pre-established limitations by OCD-
DRU. Revolving Loan Fund (RLF) limitations include:
Annual limit of 15% of total collections may be spent on program delivery and administration
expenses related to the management of on-going loan collections and generation of new
loans from the Revolving Loan Fund;
New loans made from the RLF must be provided to businesses located in one of the RLSB 51
eligible parishes;
OCD-DRU will monitor Subrecipients for compliance with the terms of RLF for a minimum of
two years, unless there are findings or concerns of non-compliance or if the Subrecipient is
placed on the LLA’s non-compliance list for an extended period of time, as defined and
determined by OCD-DRU. In such cases, OCD-DRU may extend the monitoring term or may
trigger recapture. In the event of recapture, Subrecipients will be required to either repay all
funds collected through the RLF to OCD-DRU or transfer all funds collected through the RLF
and all outstanding loans and associated files to a Subrecipient or other entity designated by
OCD-DRU.
Subrecipients will be required to submit the following documents listed below. OCD-DRU will
provide necessary forms to Subrecipients.
Program activity monthly reports
Monthly bank statements
Monthly Loan reports
Bank Statement and Loan Reconciliation
Administrative Costs tracking sheet.
Subrecipients unable or unwilling to collect on delinquent loans may refer and assign their rights as
lenders for particular loans to the State for collections. In such cases, the Subrecipient or the State
will place business owners in default and the State, through either OCD-DRU, the Attorney General’s
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Office or the Louisiana Department of Revenue’s Office of Debt Reduction will work with the business
owners to develop a repayment plan. In such cases, principal and interest payments collected from
business owners will return to the State and will remain with the State. This paragraph shall not
exempt a Subrecipient from following its collection processes.
Subgrantees and Contractors
If Subrecipients choose to use professional service providers, vendors or contractors in the
administration of the program, they must first seek approval from OCD-DRU for their plan. If
approved, Subrecipients are required to procure all professional service providers or contractors, as
per 2 CFR 200.320.
Subrecipients may also enter into an agreement with a subgrantee, which is defined as a non-profit
or quasi-public entity that will help the Subrecipient in the administration of the RLSB and which the
Subrecipient will reimburse for actual expenses, without any profit in the budget.
In such cases, it is the Subrecipient’s responsibility to monitor and ensure that all contractors
and/or subgrantees are in full compliance with federal regulations, the Subrecipient
Agreement and Program rules, including the submission of all support documentation,
required reports and OCD-DRU established guidelines and timeframes.
Agreements between Subrecipients and their contractors and subgrantees must contain the
Statement of Assurances as an appendix to the legal agreements.
OCD-DRU will monitor Subrecipients for their monitoring of their contractors and
subgrantees.
Subrecipients are responsible for ensuring they, their contractors and subgrantees and
Eligible Businesses comply with the Louisiana Ethics Code for state expenditures. OCD-DRU
will monitor Subrecipients for compliance with the Louisiana Ethics Code for state
expenditures.
CDBG-DR Requirements A. The RLSB is funded as an eligible activity under CDBG-DR, per Section 105(a) 15 of the Housing
and Community Development Act (HCDA). All requirements of the CDBG-DR program that
relate to economic development activities are applicable to the RLSB including:
1. Meeting a national objective. Subrecipients are required to collection information on each
awarded business to demonstrate how they meet one of the following national objectives:
a) Benefit to Low and Moderate Income persons, job creation;
b) Benefit to Low and Moderate Income persons, job retention;
c) Benefit to Low and Moderate Income persons, area wide benefit;
d) Benefit to Low and Moderate Income persons, limited clientele (assistance to
microenterprises whose owners are LMI); OR
e) Urgent Need
2. Guidelines for evaluating and selecting economic development projects, as per 24 CFR
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570.209, and subject to the alternative requirements listed in the applicable disaster
recovery waivers
3. Other program requirements, as applicable -- 24 CFR 570.601 (Sub part K)
4. Financial Records -- 24 CFR 570.502 and 2 CFR 200.302
5. 24 CFR 570.604 and 24 CFR Part 58 Environmental Standards
B. Subrecipients are required to report on all jobs created or retained through the program. If the
business’s activities cannot be classified as benefiting LMI persons (see below), the awarded
business must still provide job and owner information to the Subrecipient; however in such
cases, the awarded business will be classified as meeting the national objective of Urgent Need.
In order to determine whether the assistance to a business can be categorized as LMI job creation or
retention or LMI Limited Clientele for national objective purposes (24 CFR 570.483 (b) (4)), Subrecipients must
ensure:
The businesses complete, execute and submit LMI Certification forms as part of the
application and within one year of receiving the final loan payment from the Subrecipient;
Perform a financial analysis of an eligible business to justify the use of LMI Job Retention as
a national objective. Businesses may only qualify under LMI Job Retention if:
51% or greater of their total jobs retained by the applicant business are held by LMI
persons, as defined by the salary paid to the employee; AND
The company experienced a 20% decline in gross revenue since the flood events.
Collect income data on owners of microenterprises considered to be LMI
OCD-DRU will provide LMI Certification forms for each parish along with current income tables for 2017.
Awarded businesses must complete the LMI Certification form for the parish in which their
employees and/or owners reside. OCD-DRU will provide yearly updated LMI Certification forms to
Subrecipients as area median income data defined by HUD becomes available. Subrecipients will
review payroll registers, payroll forms or federal form 941 businesses are required to submit to verify
job creation or retention LMI income data reported on LMI Certification forms is accurate.
To qualify under LMI Area Benefit, a business must provide services (i.e. grocery store) that benefit
all residents in a particular service area, where at least 51 percent of the residents are LMI persons.
To determine if a business is in an LMI area the following documentation will be required:
Census tract and block group number(s) of the area the business serves
A current survey of the residents in the service area showing the percentage of LMI persons
that reside in the service area
The following resources can be utilized to obtain this information:
https://www.hudexchange.info/programs/acs-low-mod-summary-data/acs-low-mod-summary-
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data-block-groups-places/
https://geomap.ffiec.gov/FFIECGeocMap/GeocodeMap1.aspx
Applicant Business Eligibility Criteria To be eligible for benefits under the RLSB, an applicant business must meet all of the following criteria:
1. Must be either a for-profit businesses or a private non-profit organization located in one of
the 51 parishes impacted by the 2016 Severe Storms and Flooding Events:
Acadia, Allen, Ascension, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu,
Caldwell, Catahoula, Claiborne, DeSoto, East Carroll, East Baton Rouge, East Feliciana,
Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson Davis, Lafayette, LaSalle,
Lincoln, Livingston, Madison, Morehouse, Natchitoches, Ouachita, Pointe Coupee, Rapides,
Red River, Richland, Sabine, St. Helena, St. James, St. Landry, St. Martin, St. Tammany,
Tangipahoa, Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West
Carroll, West Feliciana and Winn.
2. Non-profit organizations will be evaluated for eligibility and ability to service debt based on
the secular operations of their organizations.
3. Has eligible unmet needs after accounting for all insurance, federal, state, local and private
proceeds considered to be a duplication of benefit.
4. Was operating at the time of the respective storm or flood event. The applicant business must
have been open before April 8, 2016 for the March 2016 floods and before August 31, 2016 for
the August 2016 floods.
5. Must either a) be currently operating or b) demonstrate the ability to reopen upon receiving
assistance from the program.
6. Businesses that are closed at the time of application, but who will be able to reopen upon
receiving assistance from the program must have a business plan and demonstrate they have
the funding necessary to reopen. Closed businesses must commit to re-opening in an eligible
parish; they are not required to re-open in the same location in which they were operating at
the time of the flood.
7. Has a minimum of one (1) full-time equivalent employee and no more than 50 full-time
equivalent employees. (FTEs = Full-Time Equivalents = 35 hours per week)
8. Had a pre-storm minimum annual gross revenue of $25,000.
9. Was directly impacted by the storms/floods, as a documented physical or financial loss. The program
will not fund construction-related expenses or financial losses; the assessed physical damages and
financial loss calculations are only a requirement for determining eligibility. See Award Calculation
Methodology below for additional information on how an award is calculated.
In order to qualify under physical loss, a business must demonstrate they had a minimum of
$10,000 in third-party verified physical damages or losses.
In order to qualify under a financial loss, a business must demonstrate a 20% annual gross
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revenue decline from 2015 to 2016. For the August flood, Subrecipients may submit to OCD-
DRU on an exceptions basis approval for businesses that experienced a revenue decline in the
last quarter of 2016 or the first quarter or 2017 as compared to the same quarter in the previous
year. For the March flood, the second or third quarters of 2016 will be compared to the same
quarters of the previous year. In these cases, businesses will be required to provide a justification
and financial statements to prove revenue decline.
Eligibility Exceptions Subrecipients may submit an applicant business to OCD-DRU for consideration on an exceptions basis
in cases where an applicant business may not meet all eligibility requirements. OCD-DRU will
determine in its sole discretion whether the Subrecipient has made the case that the need for an
exceptions award is critical to the community’s long-term recovery.
Other Eligibility Criteria and Limitations 1. Businesses qualify based on their pre-storm/flood location of doing business. If a closed
business is looking to re-open in a new location, that location must be in an eligible parish.
2. Non-profits are eligible based on the earned-income portion of their operations.
3. Religious non-profit organizations are eligible based on the secular component of their
operations (e.g., a church that runs a daycare or restaurant that is open to the public,
regardless of religious affiliation).
4. Bars are eligible to receive awards; package liquor stores are not.
5. Residential and/or commercial real estate businesses are not eligible.
6. Common ownership of different businesses/companies: If two or more companies or
businesses with common ownership have an owner with greater than 50% ownership in each,
only one business may qualify for an award. Owners with a ≥50% share in two or more
businesses may only qualify for one award each (a husband/wife team with 50%/50%
ownership in two legally distinct companies may qualify for one business each).
7. Owners who have received a loan and own a minority share in another business do not
disqualify that business by their ownership.
8. Privately owned recreational facilities that serve a predominantly higher-income clientele
are not eligible.
9. Assistance to privately owned sports teams is not eligible.
10. Businesses and/or business owners of sole-proprietorships/partnerships in bankruptcy are
not eligible.
11. Businesses are not eligible if they received federal assistance in the past and did not comply
with the requirement to maintain flood insurance.
12. Necessary policy changes that arise during the course of program implementation will be
decided by OCD-DRU via the Policy Clarification/Change Form process.
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Application Phases Due to a shortage of funding, the program may decide to implement the program in one or multiple
phases.
Phase I
The first phase of the program is limited to providing assistance to businesses that meet the program
eligibility requirements AND are considered to provide essential goods or services to an impacted
community. Essential goods or services are those goods or services necessary for immediate and
long-term housing and community recovery. Such goods and services may include grocery stores,
pharmacies, healthcare providers, gas stations, residential construction-related companies,
childcare providers, locally-owned restaurants and residential service providers. Prior to final
eligibility determination of a particular business that does not fall within this list of essential good
or service providers, Subrecipients may submit recommendations and justifications for expanding
the list of types of businesses included in this definition, subject to approval by OCD-DRU.
Future Phases
Should additional funding be available after the Phase I eligibility review and award determination,
OCD-DRU may decide to open the program for additional phases and may decide to expand the pool
of eligible businesses. OCD-DRU will work with Subrecipients and an updated unmet needs
assessment to determine the most effective and needed approach to opening the program in
additional phases.
Eligible Uses of Funds 1. Eligible use of proceeds includes:
a) Up to six months of documented working capital expenses, which are limited to:
Monthly rent or mortgage payments;
Monthly non-owner employee wages and benefits;
Monthly utilities (gas, water and/or electricity bills, phone, cable and/or internet
bills); and/or
Inventory
b) Purchase of moveable equipment necessary for the recovery of an impacted business.
c) Furniture is allowed only if the furniture is vital to provide the business service and will
be used directly by the patrons of the business, For example:
A restaurant’s dining room tables and chairs
A healthcare provider’s waiting room furniture and examination furniture
A child care provider’s cribs, beds, and child-specific furniture
General office or utility furniture is not eligible
2. Ineligible uses of proceeds include, but may not be limited to:
a) Acquisition of buildings
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b) Construction or construction-related activities (e.g. fixtures and/or the purchase of
equipment that requires construction activities as part of installation of the equipment)
c) Refinancing of loans
d) Payment of any tax arrearages, governmental fines or penalties
e) Purchase of real property
f) Political or religious activities
g) Buying out any stockholder or equity holder in a business
h) Buying out or reimbursing any family member
i) Investment in instruments or investments for the sole purpose of a return on investment
j) Expenses for which private philanthropy, NFIP or private flood insurance, other
insurance, state or federal benefits have been or will be paid or financial assistance that
has been approved or provided by federal, state, or other sources considered to be
duplicative of CDBG-DR funds. For additional information on Duplication of Benefits, see
below.
Duplication of Benefits
Generally, financial assistance received from another source that is provided for the same purpose
as the CBDG-DR funds is considered a Duplication of Benefit (DOB). To prevent the creation of a
duplication of benefits, program controls include, but are not limited to:
Certification that business applicants have and will notify the Subrecipients and/or OCD-DRU
of all potential DOBs as part of the information submitted in their applications and
subsequent to receiving an award from the RLSB;
Verification of specific DOBs through various available sources.
The DOB verification process will be carried out in the following steps:
Subrecipients will collect information on potentially duplicative funding sources from all
applicant businesses during the application phase.
Business applicants will be required to provide insurance provider contact information,
policy coverage information and ID, claims information and amounts received and approved
for all potentially duplicative sources.
Business applicants will be required to authorize OCD-DRU to contact all potentially
duplicative funding sources on their behalf to verify all funding sources received and/or
approved.
Using information collected from the applicant businesses and the authorization provided to
OCD-DRU by the applicant businesses, OCD-DRU will perform a verification of benefits
received and/or approved on all applicant businesses. OCD-DRU may work directly with
applicant businesses to expedite this process.
OCD-DRU will provide verified information to Subrecipients, who will use this information to
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calculate final eligible award amounts for applicant businesses.
Below is the process flow of the DOB process and a sample calculation:
1. Subrecipient Identifies Applicant Business’ Eligible RLSB Uses of Funds $100,000
2. Subrecipient Identifies All Potentially Duplicative Assistance through the
Program Application $35,000
3. OCD-DRU Verifies All Duplicative Assistance Received or Approved for the
Applicant Business and Determines only $30,000 is considered to be Duplicative
with the RLSB award. OCD-DRU Provides this information to Subrecipients;
4. Subrecipients Deduct Assistance Determined to be Duplicative from the
Applicant Business’ Eligible RLSB Uses of Funds $30,000
5. Subrecipient Calculates Final Unmet Need (Step 1 minus Step 4) $70,000
6. Maximum Program Benefit $50,000
7. Maximum Loan Award Amount (lesser of Step 5 or 6) $50,000
Award Structure and Loan Terms
Award Structure
1. Subrecipients will issue awards to awarded businesses in the form of loan packages.
a) Loans will be partially forgivable, with 40% forgivable and 60% repayable, subject to the
terms of the loan.
b) 60% of the loan will be amortized over the approved term of the awarded business’ loan;
the forgivable portion will not be repayable, unless the awarded business is placed in
default or does not meet the loan forgiveness requirements.
2. Partial loan forgiveness is based on:
a) a business’ ability to repay the loan as required by the loan agreement;
b) the provision of all requisite support documentation for use of funds, as requested by
the Subrecipient or OCD-DRU; and
c) the submission of all requisite support documentation related to meeting the national
objective of job creation, retention, microenterprise, area-wide benefit and/or urgent
need.
3. Total awards will range from $10,000 minimum to $150,000 maximum, based on a
calculation of unmet needs and eligible expenses. Exceptions can be submitted for special
circumstances. Exceptions will be issued on a case-by-case basis as approved by OCD-DRU.
Further detail on allowable exceptions will be detailed in the RLSB Exceptions Policy.
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Loan Terms
1. Interest rate is 0%.
2. The loan is structured as 60% repayable and 40% forgivable.
3. 60% of the awarded loan will be amortized over five (5) years, following a six-month period of
no principal repayment.
4. For loan requests over $50,000, OCD-DRU will consider allowing a longer term on the loan to
ease the monthly payment obligation. The subrecipient should submit an exception request to
OCD-DRU with the desired term and justification for the request.
5. If an awarded business does not meet the requirements of forgiveness of 40% of the loan,
then that remaining 40% portion will be due upon loan maturity unless Subrecipients or OCD-
DRU allow for an extension of the loan agreement to allow businesses to repay the additional
40% over a maximum of 24 months.
6. Loans delinquent longer than 90 days will be placed in default and will carry a default interest
rate of 8% from the date of the loan closing. This default rate cannot be modified.
7. Awarded businesses who use their funds for purposes not allowed by the program may be
placed in default, and the default rate may be retroactively applied to the execution date of
the loan agreement.
8. Personal guarantee required for all owners with 20% or greater ownership in the business.
9. Loans will become immediately due and payable should the business owner sell the business,
sell or dilute majority ownership or sell assets purchased with CDBG-DR funds.
10. Subrecipients may not charge closing fees to applicant businesses or OCD-DRU. OCD-DRU
will reimburse Subrecipients for staff time and eligible expenses related to the
implementation of the program.
Award Calculation Methodology: Working Capital, Movable Equipment and
Furniture
Working Capital
Due to the overwhelming need to strengthen small businesses and revitalize storm affected
communities, working capital for this program is defined as utility costs (gas, electric and water), non-
owner employee salaries, and rent or mortgage costs. For businesses requesting working capital
assistance, Subrecipients will determine an estimated monthly working capital need as the monthly
average of the 3 consecutive months prior to the storm of working capital costs.
Required documentation for working capital need includes 3 consecutive pre-storm months of:
Rent/Mortgage as evidenced by an executed Lease/Mortgage or proof of payment
Employee Wages as evidenced by certified payroll registers or employee reporting forms
Electricity, Water and Gas Utilities as evidence by Utility Service Provider Bills
Monthly inventory Bills
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Steps for calculating eligible working capital uses of funds:
The Subrecipient will review submitted documentation and the applicant’s file to ensure all
requests are “arm’s length transactions.” Transactions made by related parties or entities
are not eligible for working capital assistance. The Subrecipient and OCD-DRU have authority
to determine if a submitted transaction is determined to be an “arm’s length transaction”.
The Subrecipient will then calculate the estimated average monthly working capital need, by
totaling all the approved working capital expenses for all three months and then dividing that
total by three (3).
Using the average working capital expenses, the Subrecipient will multiply that number times
six (6) to determine the business applicant’s maximum eligible working capital assistance.
The applicant may also submit for eligible movable equipment expenses. The amount
approved for working capital and movable equipment expenses may not exceed the
maximum award.
Movable Equipment and Furniture
Applicant businesses may be eligible for assistance for unmet needs related to movable equipment,
machinery and furniture. Costs associated with movable equipment include the documented repair
or replacement of, or reimbursement for, machinery or equipment not dependent on construction,
reconstruction, ground disturbance or structural modifications.
In order to determine the amount for which a business is eligible for movable equipment and
furniture, businesses must provide documentation, invoices and/or receipts with adequate
description to determine the nature of the equipment or furniture and the installation requirements
associated with making the equipment or furniture usable.
If the requested equipment or furniture is replacement for equipment or furniture damaged or
destroyed by the floods, then the applicant business must provide verification of loss or damage
(which may include pictures). If the requested equipment is necessary for the business to reopen
and/or remain viable in the post-storm economy, the applicant business must provide justification
for the new piece of equipment or furniture. Subrecipients must ensure all program costs are
necessary and reasonable.
All eligible uses of funds will be reviewed for duplication of benefits before final award determination
and execution of loan agreements.
Final Award Determination
Once the Subrecipient has determined the total working capital, movable equipment and for
furniture expenses for which a business applicant may be eligible, the Subrecipient must provide
details of the eligible expenses and the applicant business’ duplication of benefits information to
OCD-DRU for Duplication of Benefits third-party verification. OCD-DRU will provide the verified DOB
amounts to apply against the applicant business’ award so the Subrecipient can calculate the final
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award that an applicant business is eligible to receive.
Award Calculation Methodology Sample:
Applicant Business Impacted by August 2016 Floods:
Working Capital Award
Eligible Working
Capital Category May 2016 June 2016 July 2016
Average
Working
Capital
Expenses
Eligible WC
Award: Six Months
Average Monthly
WC Expenses
Rent $4000 $4000 $4000
Gas, Electricity and
Water Utilities $2500 $3000 $3500
Non-Owner
Employees $10,000 $15,000 $15,000
Total: $16,500 $22,000 $22,500 $20,330 $121,980
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Equipment and/or Furniture Award
Cost of Eligible Pieces of Damaged Equipment: $20,000
Total Award Calculation
1. Subrecipient Calculates Eligible Amount of Working Capital $121,980
2. Subrecipient Calculates Eligible Amount of Equipment and Furniture $20,000
3. Subrecipient Calculates Applicant Business’ TOTAL Eligible Uses of Funds (total of
Step 1 plus Step 2) $141,980
4. Subrecipient Identifies All Potentially Duplicative Assistance through the Program
Application (SBA, NFIP, other business interruption insurance, etc.) $100,000
5. OCD-DRU Verifies All Duplicative Assistance Received or Approved for the
Applicant Business and Determines only $90,000 is considered to be Duplicative
with the RLSB award. OCD-DRU Provides this information to Subrecipients;
6. Subrecipients Deduct Assistance Determined to be Duplicative from the Applicant
Business’ Eligible RLSB Uses of Funds $90,000
7. Subrecipient Calculates Final Unmet Need (Step 3 minus Step 6) $51,980
8. Maximum Program Benefit $50,000
9. Maximum Loan Award Amount (lesser of Step 7 or 8) $50,000
Documentation Required from Business Applicants 1. A completed application including but not limited to:
a) Company background and history
b) Ownership information
c) Proof of ownership structure
d) Personal and/or business competences and capabilities necessary to achieve project
success and completion
e) Description of the types of eligible expenses the award will be used on
f) Detailed description of direct jobs that will be created during the first year of the loan
agreement
g) Interim financial statements.
h) Financial statements are required if full tax returns are not available during application
underwriting. The subrecipient must collect the tax returns once they become available
to complete their file.
i) Insurance documents
2. A business and development plan may be determined as a required document, at the
Subrecipient’s discretion. A business that is closed at the time of application and intends to
reopen using RLSB funds must have a business and development plan and include a business
pro-forma.
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3. Signed federal business tax returns for the business including all schedules for the most three
(3) recent years. If the business is a sole proprietorship, single member limited liability entity,
a partnership or a limited liability company taxed as a partnership, owners must submit the
three most recent years of personal tax returns
4. Signed federal personal tax returns for all principal owners (greater than 20% ownership) for
most recent three (3) years
5. Copy of current US or state government-issued identification for all owners/principals.
6. Proof of business/ownership structure.
7. Proof of number of employees, to include the completion of a program LMI Certification
form and the provision of pre-storm and current certified payrolls or other wage reports.
8. Proof of operating business address.
9. Any other relevant business documentation as requested by the Subrecipient.
Award Underwriting 1. Basic Standard Underwriting – all award applicants must fulfill the following minimum
standard underwriting criteria:
a) Determination that meets General Eligibility and Other Criteria (above)
b) All owners with greater than 20% ownership must have a Beacon credit score ≥600
Exceptions to this requirement may be submitted to OCD-DRU on a case-by-case basis
c) Global debt coverage ratio of 1.1x. Global debt coverage ratio is a ratio that combines
both personal and business income and expenses. Exceptions to this requirement may
be submitted to OCD-DRU on a case-by-case basis. If all owners have a beacon score of
700 or above, the debt coverage ratio requirement is not applicable.
d) Non-Profits will not be subject to a credit check nor will their board members be required
to provide personal guarantee. The subrecipient, at their discretion, may require their
loan to be collateralized.
2. Determination of Satisfaction of the Criteria of 24 CFR 570.209:
a) That project costs are reasonable;
b) That all other sources of project financing are committed;
c) Documentation of need and that CDBG funds are not substituted for non-Federal
financial funding or support;
d) That the project is financially feasible;
e) That to the extent practicable, the return on the applicant’s equity investment will
not be unreasonably high; and
f) That to the extent practicable, CDBG funds are disbursed on a pro-rata basis with
other finances provided to the project.
A template/guide will be provided by OCD-DRU as to how underwriting should be conducted for
these and any other required CDBG criteria.
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Application and Award Process Flow 1. Applicant business submits application to Subrecipient during the application period.
Applicant businesses may request an appointment with a Subrecipient to request additional
support or information about the RLSB Program and to understand whether they may be
eligible.
2. Subrecipient reviews application for eligibility.
3. Subrecipient contacts applicant business for additional information, if necessary.
4. Subrecipient enters all information into SAGE.
5. Subrecipient underwrites loan, reviews and verifies all support documentation and
determines total possible eligible award amounts.
a) If the applicant business is ineligible, the Subrecipient will notify the applicant business
in writing of their ineligibility.
b) If the applicant business is otherwise eligible for the program, the Subrecipient will
forward the applicant business’ information to OCD-DRU for OCD-DRU to perform the
duplication of benefits check and compliance with state taxes.
1. OCD-DRU performs duplication of benefits check.
2. Subrecipient calculates total loan award amount, using information from the duplication of
benefits check.
a) If the duplication of benefits check results in a $0 eligible award for the applicant
business, the Subrecipient issues a letter to the applicant business that they are not
approved for any assistance under the program.
b) If the applicant has an eligible unmet need, the Subrecipient issues award letter and
schedules loan closing with eligible business.
3. Subrecipient closes on all loan agreements with awarded business.
4. Subrecipient submits request for payment, via SAGE or OCD-DRU online reporting system for
eligible expenses.
5. OCD-DRU processes request for payment and wires funds to Subrecipient.
6. Subrecipient issues payment to awarded business.
Documents to be Signed and Maintained by All Awarded Businesses at Closing: Award Acceptance Agreement
Restore Louisiana Small Business Loan Agreement and Promissory Note
Subrogation Agreement ensuring that any Awards made to any of the business owners after
the closing such as Flood Insurance, SBA, etc. for unmet needs that were funded by the RLSB
award are subject to the duplication of benefits calculation and consequently may be owed
to the program.
Flood Insurance: If businesses located with a 100-year floodplain are awarded assistance for
mortgage assistance, inventory and/or equipment expenses, they are required to maintain
either building (mortgage assistance) or contents (inventory and/or equipment) flood
insurance for the life of the loan. Failure to maintain and provide proof of flood insurance
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may result in a business’ ineligibility from receiving any federal assistance in the event of
future disasters.
Uses of Funds Documentation: Working capital expenses are provided based on a pre-storm
assessment of working capital needs. The Subrecipient or OCD-DRU may monitor businesses
for final uses of funds; awarded businesses are expected to maintain support documentation
in the event of such a monitoring visit.
General Monitoring Plan – OCD-DRU Note: The audit and monitoring process detailed below generally describes currently anticipated
monitoring processes, and shall not limit OCD-DRU, its auditors, the Louisiana Legislative Auditor,
HUD or federal auditors in the scope of any audits any of them may deem prudent to perform. This
process may change.
Ongoing Technical Assistance
OCD-DRU will provide training to Subrecipients and their staff before the program opens for
applications from businesses
OCD-DRU will conduct a pre-monitoring meeting with each subrecipient to review CDBG,
state, and federal rules and regulations applicable to the program and subrecipient
Should a Subrecipient require technical assistance from OCD-DRU staff on the program
guidelines or implementation and administration requirements, they may contact OCD-DRU
for support
OCD-DRU will hold scheduled weekly, bi-weekly, or monthly conference calls to answer
questions and provide assistance to subrecipients.
Intake Process Review
OCD-DRU will provide technical assistance and to each Subrecipient during the application
period.
OCD-DRU may observe and provide technical assistance and/or monitoring results for the
Subrecipient’s application intake and processing procedures
Business Eligibility and Underwriting Reviews
OCD-DRU will perform desk and/or on-site reviews of each Subrecipient on a schedule to be
established by OCD-DRU
In the initial review, OCD-DRU will perform a minimum of 50% sample review of files
complete in SAGE.
OCD-DRU will review all files in the sample to determine whether businesses were denied or
approved in a manner that is consistent with the program policies and procedures
OCD-DRU will also review all business files in the sample for all requisite program
documentation
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If OCD-DRU determines the level of non-compliance is significant, the sample file size will be
increased.
Closing Documents Review
OCD-DRU will perform desk and/or on-site reviews of each Subrecipient during loan closing
period.
In the initial review, OCD-DRU will perform a minimum 50% sample review of loans on which
Subrecipients are ready to execute a closing.
Documentation will be reviewed to verify that files contain all required closing documents
and related information as per the program guidelines.
Subrecipient Program Compliance and Performance Review
OCD-DRU will perform desk and/or-site reviews of each Subrecipient on a schedule to be
established by OCD-DRU
OCD-DRU will review Subrecipients for organizational policies and procedures, financial
management (including required annual audit or financial report), program monitoring, and
program management, including reporting and recordkeeping requirements
Findings resulting from a monitoring visit may result in repayment of program funds from a
Subrecipient to OCD-DRU
Revolving Loan Fund and Loan Collections
OCD-DRU will monitor Subrecipients for compliance with the terms of the revolving loan fund
(RLF) for a minimum of two years.
OCD-DRU may extend the RLF monitoring term or recapture RLF funds collected if there are
findings or concerns of non-compliance or if the Subrecipient is placed on the LLA’s non-
compliance list for an extended period of time, as defined and determined by OCD-DRU.
Subrecipients will be required to submit the following documents to OCD-DRU for RLF
monitoring: program activity monthly reports; monthly bank statements; monthly loan
status and repayment reports; bank statements and loan reconciliations; and administrative
costs tracking sheet.
Monitoring Findings
OCD-DRU shall record and communicate all findings and concerns, and shall detail both compliance
of application and use of funds. Issues of non-compliance shall be categorized either as a concern or
as a finding. Subrecipients found to have unresolved findings and concerns or which received funds
in error may be required to repay program funds to the State or other measures including transfer of
loan accounts and funds on hand, as per the terms outlined in the Cooperative Endeavor Agreement.
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OCD-DRU may take action against Subrecipients found to be negligent in their responsibilities,
including but not limited to the requirement to return ineligible or unsupported program funds
and/or termination of contract, as per the Cooperative Endeavor Agreement with the Subrecipient.
Subrecipients found to be willfully fraudulent will be referred to appropriate authorities for
prosecution.
Business Verification Process: Anti-Fraud, Waste and Abuse
Multiple verification of business eligibility
As part of their applications to the Restore Louisiana Small Business Program, applicant businesses
and non-profits are required to submit the information listed on the application checklist to a
contracted Subrecipient in order for the Subrecipient to consider the applicant for program eligibility:
Category Required Items
Application Restore Louisiana Small Business Program application,
completed and signed by all owner(s) with 20% or greater
ownership in the applicant business.
Note: One owner or non-profit representative may sign with
authorization of board resolution
Proof of Identity of Owner(s) Government-issued photo ID (e.g., driver’s license, passport)
Proof Business was Established Prior to
the storm/flood event
Note: Key determination is that business
was in operation prior to April 8 for the
March or August 31 for the August 2016
flood event, as applicable
“Date of Incorporation” on corporate tax returns
Any federal business tax return 2015 or earlier
Business/Occupational License
Note: Articles of Organization, Articles of Incorporation, and
Secretary of State website may be used as support
documentation only
Proof of Ownership
Note: Applies to all owners with 20% or
greater interest
Business tax return (with appropriate schedules)
Personal Tax return (with appropriate schedules)
Stock certificates with proof of total number of shares
Proof of Address in Eligible Parish
Note: The business must have been
physically located in an eligible flood-
impacted Louisiana Parish before the
storm/ flood event and must be currently
physically located in an eligible Louisiana
parish (may be different parish)
Copy of utility bills
Lease Agreement
Tax returns
Business license
LMI Form, completed Hard copy LMI Form
Proof of Pre-storm/flood Employees ≤
50 FTEs
Federal Form 941
LA unemployment tax form
Payroll forms (e.g., Paycheck)
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Note: FTE = 35 hours/week Internal payroll register, signed
Proof Annual Gross Revenue ≥ $25,000
Note: Tax returns must be complete and
signed
Federal tax form 1120 (corporations)
Federal tax form 1040 Schedule C (sole proprietorships)
Schedule F (farmers)
Federal tax form 1065 (partnerships)
Federal tax form 990 (tax-exempt organizations)
Note: These forms may be from 2015 or 2016; gross revenues
for businesses that opened during 2015 or pre-storm/flood
2016 will be annualized to determine whether the pro-rated
amount of gross revenue would have been greater than
$25,000 for the year
Proof of Financial Loss (20% Gross
Revenue Decline)
Complete 2015 and 2016 tax returns, signed
$10,000 physical damage or asset loss Insurance loss report or claims, SBA Verified Loss Report
and/or receipts for replacement
Casualty loss reported on 2016 tax returns
Note: Photos may be used as supporting evidence only
Proof Business is currently Open Any business tax return from 2016 reflecting revenue earned
Sales receipts
Sales tax returns
Subrecipient site visit
Note: Secretary of State website may be used as support
documentation
Proof Business has the ability to
reopen
Business Plan
Pro-forma
Proof of funding availability for all sources needed to reopen
Lease agreement for new site
Consolidated entry of loan applications into a universal electronic database
Entry of all applications into a single database, SAGE CRM will allow for screening/elimination of
duplicate applications, as all awardees will be cross referenced by business name, owner name and
Social Security Number and/or Federal Employee Identification Number (EIN). Only one loan is allowed
for each majority owner or distinct business. Consolidation of all data into a single database also
allows for generation of tabular and graphic reports, which facilitate data review.
Review of awardees against Secretary of State lists
The Secretary of State website may be used to provide an additional verification of the incorporation
information supplied in applications.
Review of awardees against Federal Debarment
Subrecipients will verify all business owners, business entities and non-profit organizations are
eligible to receive federal funds and are not debarred from receiving federal assistance prior to
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executing a loan agreement with an awarded business. Information on whether a business owner,
entity or non-profit is debarred from receiving federal assistance can be found at:
https://www.sam.gov/portal/SAM/